Search wars - Round 2?

Is Microsoft's
launch strategy for its new search engine 'Bing' going to allow it
to encroach on Google's market share? That's the big question.
Rumour has it that Microsoft has $100m for its marketing campaign,
but Comscore stats for the last 6 months in the US, show market
share as being largely static with Google being considerably ahead,
and Microsoft significantly behind, so there will be a long way to
go to catch up. They might need a bigger boat.

The above graph shows the uplift
in search activity on Google for the term 'ask jeeves' in April
which coincides with the re-launch and the bringing back of jeeves
the butler, so advertising does work in terms of raising awareness
of a search engine, but whether that growth is sustainable after
the advertising stops remains to be seen.

'Build a better
search engine' as a strategy is unlikely to work, even if it is
heavily and well communicated to the user. Much of the proposed
re-launch and marketing is likely to focus on new features, but if
Microsoft thinks it can win audiences back based on features and
better results it might be disappointed. Users respond poorly to
flashy options and creative interfaces and just want relevance and
simplicity and Google has that in spades. I think their marketing
strategy will need to go beyond pragmatism. They need to break
people's habits, so it will be interesting if they can encourage
that to happen.

Even if they do
start to be successful, it's unlikely that other search engines
like Google will allow their lunch to be eaten, and if it's just a
case of ad dollars, then Google has deep pockets. They'll no doubt
fork out to defend their turf. Whether that will be an unscheduled
expenditure which dents their earnings or not, I'm not sure, but I
expect they have a war chest contingency for Microsoft's inevitable
confrontation.

Microsoft has
its eye on Ad revenue, but needs to secure market share of search
to have a viable offering for advertisers and its low reach means
that it's a poor choice for marketers looking to buy significant
search advertising inventory.

Microsoft
gaining market share will also be welcome news for agencies and
advertisers who feel somewhat beholden to Google in an industry
that needs competition. Marketers like to be able to allocate their
budgets across multiple options to spread risk, and feel that media
owners want their ad spend. This is something they don't always get
form Google. I think some serious competition will encourage new
features, options and incentives for advertisers. Google pulled its
Best practise funding programme at the beginning of the year,
ending an era of agency buying discounts. An act based largely on
maximising revenues and not needing to compete for ad
spend.

Search engine ad
inventory is not infinite, and there's only so much of it.
Especially in a recession with many commercial categories finding
fewer people actively searching. If Microsoft were to win a
significant amount of market share, this would have an impact on
Google's revenues, as it fought on 3 fronts declining adspend, the
need to potentially offer advertiser incentives, and losing adspend
to Microsoft.

Agencies and
advertisers may also benefit from increased ad spend possibilities
with Microsoft as it still offers discounts to agencies, so an
increase in its ability to be a useful and volumous media owner
will allow advertisers and agencies to generate more
revenues.